Ministers brace for 100-day policy blitz
Summer may be coming but there will be no holiday for the country’s new government. Vernon Small takes a closer look at the work that will keep our freshly minted ministers busy and off the beaches.
There is a political whirlwind building in Parliament. The ministerial warrants have been handed out in the Labour-NZ First Government and ministers from the two parties – as well as three Green ministers outside Cabinet – are getting their feet under their desks.
Incoming ministers will move into the Beehive over the weekend and they are busy filling a huge number of vacancies in their offices, while there is a matching exodus from the National side.
MPs will be sworn in on November 6 and Governor-General Dame Patsy Reddy will read the Speech from the Throne on November 7, outlining the Government’s programme.
But the clock has started ticking on the Government’s agenda for its first 100 days, outlined by Prime Minister Jacinda Ardern at a rally in Wellington during the campaign.
It will set in train measures that will boost household incomes but also bring in broader changes towards a more hands-on and interventionist Government after nine years of National-led incrementalism.
In combination with the Greens, in particular, Labour is also promising to clean up the country’s rivers and take ‘‘serious action on climate change’’.
Under the deal struck with NZ First, the regions are also in for a boost with $1 billion a year in capital spending earmarked for infrastructure, tree planting and projects. In total, it represents the biggest shift in economic and regulatory settings since the Rogernomics revolution that started in 1984 – albeit more lowkey than the upheavals introduced by the Lange government.
The most obvious will be the promised rapid move to a huge state-funded building programme – a step National refused to take, even though it pulled most of the other available levers to try to solve the housing crisis.
NZ First leader and now Deputy Prime Minister Winston Peters has swung strongly in behind Labour’s KiwiBuild policy, which has been on its radar through five years and four leaders since David Shearer first announced it. It promises to build 10,000 affordable houses a year – though that may
It represents the biggest shift . . . since the Rogernomics revolution that started in 1984.
take some time to gear up – which will be on-sold to first-time buyers, all financed by a $2b capital fund. There will also be the most significant, initially mostly symbolic, change to monetary policy since the Reserve Bank Act was introduced in the late 1980s.
It will see full employment added to the Reserve Bank’s requirement to address price stability, though Peters did not win his wish for a full Singapore-like monetary policy model that targets the currency.
Most financial commentators are downplaying the move, arguing it is common with other central banks and will not have a lot of impact on the way the Reserve Bank makes its call on interest rates.
Finance Minister Grant Robertson has not defined what full employment means, other than that it is definitely less than 5 per cent unemployment.
Right now that is not an issue. But, if the country ever returns to a high-inflation, highunemployment scenario, it could see a very different reaction from the bank than simply a rate-hiking response.
Ardern’s description of her government is one that is ‘‘active
. . . working alongside people to ensure that they are having all of their needs met’’. That includes an aim to change the economy so it does not simply rely on the housing market and population growth.
Peters is on the same page – maybe a page ahead in terms of immigration – but puts his stress on the failure of the current ‘‘neoliberal’’ economic model to deliver for the people of New Zealand.
But for anyone doubting this will be a government intent on change, as opposed to tweaking current settings, Peters made it clear his choice to go with Labour rather than National was predicated on that very question.
It wasn’t just about ‘‘capitalism
with a human face’’, it was also a choice between ‘‘the modified status quo’’ (National) and ‘‘change’’.
As far as specific changes go, first up will be a raft of changes agreed by the three parties during two weeks of post-election talks. However, with a couple of exceptions, the first 100 days will put Labour’s plan into action.
Plans are afoot for a mini-Budget to approve the incoming Government’s urgent plans, which include an immediate resumption of payments to the ‘‘Cullen’’ Superannuation Fund – which Labour budgeted at $500 million this year. The only changes to Ardern’s 100-day plan – which will need to be completed by February 3 to fulfil her promise – sprang from Labour’s talks with NZ First.
Into the programme comes Peters’ demand for a ‘‘waka jumping bill’’, aimed at forcing MPs out of Parliament if they try to switch parties between elections. It resurrects a measure last active on the statute books in 2005 that had its genesis in the defections Peters suffered from his party in the 1996-1999 government – proving, if nothing else, that Peters has a long memory for potential trouble.
Out of Labour’s original 100-day plan goes the controversial tax on irrigation water and the planned clean-water summit that would have looked at the regime, although a royalty on exported bottled water has survived the talks. But Labour’s urgent list still includes a raft of new laws that will significantly increase entitlements and boost the supply of affordable houses as the Government moves to improve the lot of the low paid and of first home buyers.
They include laws to ban overseas housing speculators, cancel the National government’s tax cuts, due to take effect in April, and replace them with Labour’s Family Support package.
It takes effect in July and will include a ‘‘winter energy payment’’ to pensioners and beneficiaries.
It will be worth $450 a year for a single person and $700 a year for a couple or someone with dependent children.
The Government will also bring in Labour’s ‘‘best start’’ programme, which gives $60 a week to those with a new baby for the first year, after paid parental leave ends.
For low to middle-income families, the payment runs until their child is 3 years old.
Paid parental leave will increase to 26 weeks and the minimum wage will be boosted to $16.50 an hour next year and will rise to $20 by April 2021.
Other measures to be put in place by February are:
Make the first year of postsecondary education or training fees free from January 1.
Increase student allowances and living-cost loans by $50 a week from January 1.
Pass the Healthy Homes Guarantee Bill, requiring all rentals to be warm and dry.
Putting an immediate halt on the sale of state houses by Housing NZ.
Begin work to establish the Affordable Housing Authority and the KiwiBuild programme. The initial funding will be $2 billion.
Set up a ministerial inquiry into mental health.
Introduce a law to make medicinal cannabis available for people with terminal illnesses or in chronic pain.
Back up Ardern’s decision to take the child poverty reduction portfolio with a law that sets a child poverty reduction target and changes the Public Finance Act so the Budget reports progress on reducing child poverty.
Establish the controversial Tax Working Group to look at changes to the tax system, which Ardern promised late in the campaign would not take effect before the 2020 election but could be put into law sooner.
Set up the Pike River Recovery Agency, with Andrew Little already appointed as the responsible minister.
Establish an inquiry into the abuse of children in state care.
Set the zero carbon emissions goal at 2050, with a Zero Carbon Act, and begin setting up an independent Climate Commission.
But there are other measures not on the list that are also pressing.
Robertson, with the agreement of NZ First and the Greens, will be keen to make those changes to the Reserve Bank Act.
In a nod towards Peters’ views, he could yet add the currency to the factors mentioned in the policy targets agreement between him and the Reserve Bank governor.
With a new governor set to be appointed soon by the bank’s board, Robertson would be wise to get those changes in place before acting governor Grant Spencer’s term ends on March 26.
Also high on the agenda will be dismembering the Ministry of Primary Industries to set up separate ministries for fishing, forestry and agriculture, as well as a Rotorua-based reincarnation of the forestry service.
The giant Ministry of Business, Innovation and Employment is also facing a major revamp and may be broken up in the near future.
A move to allow the Auckland Council to introduce a petrol tax, mooted to be set at 10c a litre, is also likely to be fast-tracked and could be on the agenda for the mini-Budget, though it is not part of the official 100-day plan. It all adds up to far more than just a range of new faces and the swapping of offices in the Beehive.
The winds of change are about to reach gale force.